Changes at Ghandhara

Ghandhara Nissan (PSX: GHNL) has been in the news for the past year each time French car maker Renault was mentioned—which is a lot given the growing excitement of car enthusiasts and auto industry watchers in the country. The company’s stock price also soared owing to heavy market speculation. However, in a notice to the stock exchange, the company clarified that its alliance with Renault-Nissan did not pan out and while talks with Nissan were still underway, the alliance would likely choose only one partner to manufacture both Renault and Nissan vehicles.

Since then, Renault signed on with the UAE-based Al-Futtaim group to manufacture its cars in Pakistan, given necessary approvals from the government and as per the new auto policy. News reports suggest that the partners could introduce cars as early as 2019 though no investment or production numbers have been shared. We will update this column as we hear more.

For its existing commercial vehicle business, there have been changes too. Between July and October, the company assembled only one truck, according to numbers reported by PAMA. The company had announced early on in February that it would no longer be manufacturing its renowned PKD trucks that belonged to UD Trucks in Japan owing to a wound up of the latter’s operations in mid-sized models. UD intends to focus on larger heavy duty vehicles globally.

However, GHNL has made other plans. It signed on with the Chinese JAC motors in April to manufacture JAC light trucks in Pakistan and is already selling these after importing them in Completely Built Unit (CBU) form. Soon it will start assembling them. Moreover, the company set up a subsidiary to introduce Dongfeng heavy and light commercial vehicles which it has been importing as well. Together with the production of Isuzu, Ghandhara has a capacity to manufacture 4,000-5,000 trucks but nearly 15 percent of manufacturing went to UD trucks. The new X200 JAC trucks and Dongfeng assembly may not be able to fill the gap so fast and even if market share is retained with CBU imports, it could affect company’s margins over the next year.